City Council - Regular Meeting

CALL TO ORDER - #3089

ROLL CALL - City Clerk

PUBLIC INPUT

Members of the public may provide comments in writing, in person or in real time via Zoom to address the City Council on items on the Closed Session Agenda.

CLOSED SESSION UPDATE - City Attorney David E. Kendig

CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION

Significant exposure to litigation pursuant to Government Code § 54956.9(d)(2): (2 cases)

CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION

Initiation of litigation pursuant to Government Code § 54956.9(d)(4): (2 cases)

CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION

Significant exposure to litigation pursuant to Government Code § 54956.9(d)(2): (1 case) - related to the fire at the North Hangar owned by the Navy and the release of hazardous materials therefrom

LIABILITY CLAIM

[Government Code § 54956.95] Claimant: The Center for Toxicology and Environmental Health, L.L.C Agency claimed against:

CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION

pursuant to Government Code § 54956.9(a): (5 cases) A. Nicole Aragon v. City of Tustin, et al., U.S.D.C.- C.D. Cal., Case No. 8:25-cv-01741-HDV-JC. B. Joaquin Barraza v. City of Tustin, et al., U.S.D.C.- C.D. Cal., Case No. 8:24-cv-02286-JWH-DFM C. Edwin Cruz v. City of Tustin, et al. U.S.D.C.- C.D. Cal., Case No. 8:25-cv-01735-ADS D. Kimberley Ann Davis v. Brian Baron, et al., OCSC Case No. 30-2025-01487435 E. Emily Garcia-Areas v. City of Tustin, et al, U.S.D.C.- C.D. Cal., Case No. 8:22-cv-00131 SPG

CALL TO ORDER - #3089

PRESENTATION OF COLORS, INVOCATION AND PLEDGE OF ALLEGIANCE

American Legion

PUBLIC INPUT

At this time, any member of the public may address the Council on matters which are not on this evening's agenda, provided the matter is within the subject matter jurisdiction of the City Council.

CLOSED SESSION REPORT

City Attorney David E. Kendig

ADOPT RESOLUTION NO. 25-74 FORMING AND LEVYING ASSESSMENT WITHIN THE TUSTIN LANDSCAPE AND LIGHTING REASSESSMENT DISTRICT 2025 REPLACING THE EXISTING TUSTIN LANDSCAPE AND LIGHTING DISTRICT

The Tustin Landscape and Lighting District was formed in 1985 and provides funding for the maintenance of perimeter landscaping on arterial streets and for the operation and maintenance of street lighting on public roads within the Tustin Ranch area. The current assessment revenue is no longer sufficient to cover the cost of maintaining the public infrastructure. On September 16, 2025, the City Council approved the Engineer's Report for the Levy of Annual Assessments for the Tustin Landscape and Lighting Reassessment District 2025 and set a public hearing for December 2, 2025. At the close of the public hearing, all returned ballots will be tabulated to determine if there is sufficient property owner support for creating Tustin Landscape and Lighting Reassessment District 2025. Recommendation: It is recommended that the City Council: 1. Conduct a public hearing to receive public input on the formation of Tustin Landscape and Lighting Reassessment District 2025 and associated assessments to be levied for Fiscal Year 2026-2027; and 2. After tabulation of all returned ballots, and if a majority in support the formation of Tustin Landscape and Lighting Reassessment District 2025, adopt Resolution No. 25-74. Fiscal Impact: Sufficient funds are budgeted and appropriated in the Tustin Landscape and Lighting Fund for the required property owner's official assessment ballot proceedings for the proposed reassessment district. The costs for operating and maintaining the public infrastructure in the Tustin Landscape and Lighting District are offset through the levy of the annual assessments. The proposed Tustin Landscape and Lighting Reassessment District 2025 contains the same cost-recovery structure with proposed annual assessments and a general fund contribution. The proposed reassessment district has no impact on the existing Tustin Landscape and Lighting District Fund's budget for Fiscal Year 2025-2026. If approved by the property owners, the reassessment district will replace the existing district and levy assessments commencing Fiscal Year 2026-2027. Similarly, the General Fund contribution would increase in Fiscal Year 2026-2027 and each year thereafter, consistent with the proposed schedule outlined in the Engineers Report and Table 2 below. Should the Tustin Landscape and Lighting Reassessment District 2025 fail to be approved by the property owners, maintenance will remain at reduced service levels and will be refined annually to ensure expenses do not exceed revenue. RESOLUTION NO. 25-74 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA APPROVING THE FORMATION OF TUSTIN LANDSCAPE AND LIGHTING REASSESSMENT DISTRICT 2025 AND CONFIRMING THE ANNUAL ASSESSMENTS FOR FISCAL YEAR 2026-2027

WAIVE READING IN FULL OF ALL ORDINANCES AND RESOLUTIONS ON THE AGENDA

Recommendation: That the City Council waive reading in full of all ordinances and resolutions on the agenda and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.

APPROVAL OF MINUTES - THE CLOSED SESSION MEETING AND THE REGULAR MEETING OF THE CITY COUNCIL HELD ON NOVEMBER 18, 2025.

Recommendation: That the City Council approve the Action Minutes of the City Council Closed Session Meeting and Regular Meeting held on November 18, 2025.

RATIFICATION OF PAYROLL AND DEMANDS

The City Council has approved the use of Government Code Section 37208 to expedite the payment of City of Tustin obligations that are in accordance with the approved budget or continued operations authorizations. Recommendation: It is recommended that the City Council approve Payroll in the amount of $1,169,867.70 and Demands in the amount of $3,470,794.02.

RENTAL AGREEMENT WITH KYA SERVICES, LLC

Request for approval of a new Rental Agreement with KYA Services, LLC for the 84,000-square-foot, City-owned warehouse building located at 15171 Del Amo Avenue for the term of August 2026 through July 2031. Recommendation: It is recommended that the City Council authorize the City Manager to execute the new Rental Agreement between the City and KYA Services, LLC subject to any non-substantive modifications as may be deemed necessary and/or recommended by the City Attorney.Fiscal Impact: Pursuant to the new Rental Agreement, KYA Services, LLC will pay the following annual rent amounts to the City to be deposited into the General Fund: - August 2026-July 2027: $1,395,924 - August 2027-July 2028: $1,521,552 - August 2028-July 2029: $1,597,632 - August 2029July 2030: $1,677,516 - August 2030-July 2031: $1,761,396 City costs will be limited to capital improvements such as parking lot maintenance or roof repairs (if needed) during the term of the Rental Agreement.

MEASURE M2 FAIRSHARE ANNUAL EXPENDITURE REPORT

The Local Transportation Authority Ordinance No. 3 requires the City to adopt an annual expenditure report detailing Net Revenues, developer/traffic impact fees, and City expenditures that meet the Maintenance of Effort (MOE) requirements. The Orange County Transportation Authority (OCTA) established the MOE benchmark with the original passage of Measure M. Under the MOE requirement, the City must spend local funds on transportation-related projects each fiscal year to remain eligible to receive Measure M2 Fairshare funds. For Fiscal Year 2024-25, the City's required MOE expenditure is $1,938,025. Recommendation: It is recommended that the City Council adopt Resolution No. 25-73, adopting the Measure M2 Expenditure Report for Fiscal Year 2024-2025 (attached), and direct staff to file the report with the Orange County Transportation Authority. RESOLUTION NO. 25-73 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA CONCERNING THE MEASURE M2 (M2) EXPENDITURE REPORT FOR THE CITY OF TUSTIN, CALIFORNIA Fiscal Impact: There is no fiscal impact associated with this item.

ACCEPT IMPROVEMENTS AND FILE A NOTICE OF COMPLETION FOR THE EL CAMINO REAL WATER MAIN RELOCATION PROJECT

Construction of the El Camino Real Water Main Relocation Project has been completed to the satisfaction of the City Engineer and is now ready for City Council acceptance. Recommendation: It is recommended that the City Council: 1. Adopt Resolution No. 25-72 accepting the improvement of the El Camino Real Water Main Relocation Project; and 2. Authorize the City Engineer to execute and file the Notice of Completion with the Orange County Recorder's Office. RESOLUTION NO. 25-72 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ACCEPTING THE PUBLIC WORKS AND IMPROVEMENT AND AUTHORIZING THE RECORDATION OF THE NOTICE OF COMPLETION FOR THE EL CAMINO REAL WATER MAIN RELOCATION PROJECT, (CIP NO. 60178) Fiscal Impact: A total of $596,555.30 was appropriated in the Fiscal Year 2025-2026 Capital Improvement Program Budget for this project. The final construction cost for the El Camino Real Water Main Relocation Project is $557,049.32. This cost consists of the original contract with Nelos Construction, Inc., in the amount of $393,399.10, a change order for $96,555.30 for additional work requested by the partner agencies, and additional project change orders totaling $67,094.92 outside the original scope of work. Agreement COT-56 between the City of Tustin and the Orange County Transportation Authority authorizes the full reimbursement for final design and all construction costs, minus an accrued depreciation credit of $2,650.

EXTENSION AND AMENDMENT OF EXCLUSIVE NEGOTIATING AGREEMENT WITH CD-CW (TUSTIN) LLC FOR A PORTION OF LAND AT TUSTIN LEGACY

Request for approval of an extension of the Exclusive Negotiating Agreement with CD-CW (Tustin) LLC to continue the negotiating period for the disposition and development of a portion of Disposition Area 8B at Tustin Legacy for up to an additional 180 days. Recommendation: It is recommended that the City Council take the following actions: 1. Approve an extension of the Exclusive Negotiating Agreement for an additional period of 120 days with a secondary 60-day extension subject to the approval of the City Manager in their sole discretion in accordance with Section 4.2 of the Exclusive Negotiating Agreement, as amended. 2. Authorize the City Manager to execute an amendment to the Exclusive Negotiating Agreement reflecting the two extensions as requested by CD-CW (Tustin) LLC, establish a milestone schedule of performance for CD-CW (Tustin) LLC to adhere to, clarify Exclusive Negotiating Agreement extension deposit amounts and that they may be applied to the purchase price deposit but shall remain nonrefundable, and make any non-substantive additions or modifications as may be deemed necessary and/or recommended by the City's special real estate counsel or the City Attorney prior to the end of the Exclusive Negotiating Agreement Negotiating Period. Fiscal Impact: The Exclusive Negotiating Agreement will be amended to require a $150,000 extension deposit for the first 120-day extension and a $100,000 extension deposit for the second 60-day extension. Pursuant to the Exclusive Negotiating Agreement, the City retains these deposits if the Disposition and Development Agreement is not executed, or if the Disposition and Development Agreement is executed but close of escrow does not occur. If the Disposition and Development Agreement is executed and close of escrow occurs, the extension deposits (without interest accrued) are applicable to the purchase price and the purchase price deposit. CD-CW (Tustin) LLC also has a deposit account with the City that will continue to fund the City transaction expenses incurred by staff and third-party consultants including the retention of legal counsel associated with the negotiation and drafting of the transaction documents.

APPROVE AMENDMENT NO. 1 TO CONSULTANT SERVICES AGREEMENT WITH TY LIN INTERNATIONAL

Staff is recommending that the City Council approve Amendment No. 1 to the Consultant Services Agreement with TY Lin International to provide design modifications of the Armstrong Avenue Pedestrian Bridge Project (CIP No. 70257). The City will be exploring design alternatives in effort to reduce construction costs. Recommendation: It is recommended that the City Council approve Amendment No. 1 to Consultant Services Agreement with TY Lin International to provide design modifications of the Armstrong Avenue Pedestrian Bridge Project, in an amount not to exceed $320,000.00, which includes a 15% contingency, and authorize the City Manager to execute the Agreement on behalf of the City.Fiscal Impact: The proposed Amendment No. 1 to Consultant Services Agreement with TY Lin International includes a not-to-exceed total compensation amount of $320,000.00, which includes a 15% contingency. Sufficient funds have been appropriated in the Fiscal Year 2025-2026 Capital Improvement Program Budget.

VACATION OF A PORTION OF AUTO CENTER DRIVE

California Streets and Highways Code authorizes the City Council to vacate all or a portion of a street within the City when it is no longer necessary for current or prospective public street purposes, either on its own initiative or upon request of an interested party. A request was received from the owners of Tustin Lexus and Tustin Cadillac to vacate a 12-foot wide strip of right-of-way around the perimeter of the Auto Center Drive cul-de-sac adjacent to their properties, reducing the curb radius to 40 feet. On November 4, 2025, the City Council adopted Resolution No. 25-21 declaring its intent to vacate and set a public hearing for December 2, 2025. Additionally, pursuant to the Surplus Land Act, the City Council must make findings and adopt a resolution declaring property to be conveyed as exempt surplus land. Recommendation: It is recommended that the City Council take the following actions: 1. Conduct the Public Hearing to vacate a portion of Auto Center Drive; and 2. Adopt Resolution No. 25-68 ordering the vacation of a portion of Auto Center Drive; and 3. Adopt Resolution No. 25-69 declaring the portion of Auto Center Drive to be vacated as exempt surplus land pursuant to California Government Code Section 54221(f)(1)(E) and the Final Updated Surplus Land Act Guidelines Section 103(c)(6); and 4. Authorize the City Manager to submit the appropriate documentation to the California Department of Housing and Community Development in connection with Resolution No. 25-69; and 5. Authorize the City Manager to take all actions and execute agreements necessary or appropriate to complete the vacation and transfer. RESOLUTION 25-68 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ORDERING THE VACATION OF A PORTION OF AUTO CENTER DRIVE RESOLUTION NO. 25-69 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DECLARING CERTAIN REAL PROPERTY COMPRISED OF PORTIONS OF AUTO CENTER DRIVE AS EXEMPT SURPLUS LAND PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 54221(f)(1)(E) AND THE FINAL UPDATED SURPLUS LAND ACT GUIDELINES SECTION 103(c) (6) Fiscal Impact: The City obtained an appraisal determining the fair market value of Parcel A and Parcel B, depicted in Resolution No. 25-68, to be $14,000 and $30,000, respectively. If the proposed street vacation is approved, the adjacent property owners have agreed to pay fair market value at the above noted prices with proceeds deposited to the General Fund.

ZONE CHANGE 2025-0001, VESTING TENTATIVE TRACT MAP 19390/SUBDIVISION 2025-0001, DESIGN REVIEW 2025-0004, AND CONSIDERATION OF A FINAL ENVIRONMENTAL IMPACT REPORT FOR THE DEVELOPMENT OF 145 RESIDENTIAL UNITS AT THE SOUTHEAST CORNER OF 17TH STREET AND PROSPECT AVENUE

This item is consideration of the proposed Cypress Grove project, a 145-unit for-sale residential community on an 8.5-acre site, presently known as Tustin Financial Plaza located at the intersection of 17th Street and Prospect Avenue. Redevelopment of the site will require the demolition of five existing commercial office buildings, a zone change to allow for residential unit development, a tract map for subdivision of the condominium units, design review, and associated environmental analysis. On November 17, 2025, the Planning Commission unanimously approved Resolution Nos. 4535, 4536, and 4537, recommending City Council approval of Zone Change 2025-0001, Vesting Tentative Tract map 19390/Subdivision 2025-0001, Design Review 2025-0004, and certification of the Final Environmental Impact Report. Recommendation: That the City Council: 1. Adopt City Council Resolution No. 25-65, certifying the Final Environmental Impact Report and adopting the Findings of Fact, Statement of Overriding Considerations, and Mitigation Monitoring and Report Program for Zone Change 2025-0001, Vesting Tentative Tract Map 19390/Subdivision 2025-0001, and Design Review 2025-0004. 2. Introduce and conduct first reading by title only of Ordinance No. 1573 to approve Zone Change 2025-0001 to rezone the site from Planned Community Business Park to Planned Community Residential and adopt a new development plan to establish permitted residential uses and development standards for the construction of 145 residential condominiums on approximately 8.5 acres. 3. Adopt City Council Resolution No. 25-66 to approve: a. Vesting Tentative Tract Map 19390/SUB 2025-0001 to subdivide the property to construct 145 residential condominiums on approximately 8.5 acres. b. Design Review 2025-0004 for the design and site layout of 145 residential condominiums. RESOLUTION NO. 25-65 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, CERTIFING THE FINAL ENVIRONMENTAL IMPACT REPORT AND ADOPTING CEQA FINDINGS OF FACT, A STATEMENT OF OVERRIDING CONSIDERATIONS, AND MITIGATION MONITORING AND REPORTING PROGRAM FOR ZONE CHANGE 2025-0001, SUBDIVISION 2025-0001 / VESTING TENTATIVE TRACT MAP 19390, AND DESIGN REVIEW 2025-0004 ORDINANCE NO. 1573 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA APPROVING ZONE CHANGE 2025-0001 TO AMEND THE CITY'S ZONING MAP TO APPLY THE PLANNED COMMUNITY RESIDENTIAL ZONING DESIGNATION TO AN 8.5-ACRE SITE (ASSESSOR PARCEL NUMBERS (APNS) 401-401-12, -13, -14, -15, -16, AND -17) TO ACCOMMODATE THE CONSTRUCTION OF A 145-UNIT RESIDENTIAL CONDOMINIUM PROJECT RESOLUTION NO. 25-66 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA APPROVING SUBDIVISION 2025-0001/VESTING TENTATIVE TRACT MAP 19390 AND DESIGN REVIEW 2025-0004 AUTHORIZING THE CONSTRUCTION OF A 145-UNIT RESIDENTIAL CONDOMINIUM PROJECT AT AN 8.5-ACRE SITE (ASSESSOR PARCEL NUMBERS (APNS) 401-401-12, -13, -14, -15, -16, AND -17) Fiscal Impact: There is no fiscal impact associated with this item however, the applicant has provided a Fiscal Impact Analysis (Attachment M), that considered ongoing general fund revenues to the City from property tax and sales tax, showing an estimated net positive benefit of about $191,000 in the first year.

MAYOR PRO TEM SELECTION

The City Council selects a member of the Council who will serve as Mayor Pro Tem for the following year. Recommendation: Pleasure of the City Council Fiscal Impact: There is no fiscal impact associated with this item.

MAYOR, MAYOR PRO TEM AND COUNCIL MEMBER COMMENTS AND REPORTS